OPEC+ Stays Course on Oil Output Boost in August

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, said on Thursday that they would stick to a previously decided output boost in August despite calls for bigger increases to rein in crude prices.

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At its last meeting in early June, OPEC+ decided to advance the planned output increases of 432,000 barrels per day (bpd) for September and redistribute it equally to the previous two months, thus raising production each month by 648,000 bpd in July and August.

On Thursday, the 30th OPEC and non-OPEC Ministerial Meeting confirmed the plan to increase production by 648,000 bpd in August. In addition, the OPEC ministers and their 10 allies, including Russia and Mexico, agreed to meet again electronically on August 3.

This increase had already been agreed on June 2, under growing Western pressure to open more taps in order to curb rising energy prices and inflation.

In theory, with the output increase in August, OPEC+ would finish recovering the level of pumping it had before reducing it in 2020 by almost 10 million barrels per day (mbd) to face the historical collapse in demand and oil prices caused by the pandemic.

But given that most producers face serious limitations on their production capacity, the group has been pumping below the established quota for several months, which raises doubts that it will be able to supply the promised volumes.

The alliance's total quota will be 43.85 mbd as of August 1, of which 26.69 mbd correspond to OPEC and the rest to the allies. Saudi Arabia's quota rises to 11 mbd, identical to Russia's, despite the fact that Moscow recognized that its extractions are falling as a result of the sanctions imposed by the European Union for its invasion of Ukraine.